ACF Academy

Category: Risk Management

PRM Associate Certificate

ACF’s training program for delegates studying for the PRM Associate Certificate uses our unique blended-learning methodology which integrates eLearning, instructor-led sessions, and hands-on practical application.
 

Program Objectives

The principal objectives of the seminar are to:
 
  Give delegates a clear understanding of the principles and practices of risk management
  Provide a thorough grounding in the concepts of risk and return
  Ensure that delegates understand the workings of each of the major financial instruments and markets, and the underpinnings of modern finance theory
  Demonstrate the benefits of hedging and the different ways in which efficient hedges can be constructed
  Explore the principles of bank Asset and Liability Management (ALM)
  Discuss risk management practices in market, credit, and operational risk, and in corporate governance
  Examine cases where risk management has failed
  Review current best practices
  Ensure that delegates are thoroughly prepared for the PRM Associate Certificate exam
   

 
Training Methids
 
Our blended-learning program comprises the following steps:
 
Training methods - the steps
 
  • Pre-Course Preparation using Acumen eLearning system – Delegates will have access to the relevant courses from the extensive Acumen eLearning System library. Acumen facilitates efficient preparation for the instructor-led sessions, and offers convenient revision for the PRM Associate Certificate exam itself.
  • Intensive Instructor-led Training – This intensive three-day program will provide thorough training for the PRM Associate Certificate, and will cover every aspect of the syllabus. During the various sessions, delegates will have the opportunity of discussing more difficult areas, trying hands-on practical exercises to test and consolidate knowledge, and dealing with any difficulties encountered in the online learning.
  • Mock Examination – At the end of the intensive three-day program, delegates will sit a shortened version of the full three-hour PRM Associate Certificate exam to gain practice at the type of questions which are asked. The instructor will fully de-brief the mock exam so that delegates can see the reasons behind any answers they have got incorrect.
  • Post-Course Revision and Review – Delegates will have continuing access to the Acumen eLearning courses for further revision and review. In addition, they can contact the instructor by email for answers to specific questions about the syllabus or the exam.
 
 
Learning Resources
 

On joining ACF’s PRM Associate Certificate Training Program, delegates will enjoy full access to:
 
  • The Essentials of Risk Management – the main reference source for the PRM Associate Certificate.
  • Extracts from the Professional Risk Managers' Guide to Financial Markets and Risk Management Practices – which supplement the Essentials of Risk Management.
  • A series of case studies and workshop exercises – each with a fully worked model answer – to illustrate the calculations involved in pricing and risk measurement.
  • The complete Acumen eLearning system library, comprising around 200 courses and over 600 modules.
  • A complete set of presentation materials on every topic covered by the instructor-led sessions, comprising around 1,000 professionally-produced slides explaining every topic
  • AcumenAssess – our online testing and appraisal system pre-loaded with questions on PRM Associate Certificate topics.
  • The Acumen Learning Portal – with the complete set of learning resources, all in one easy-to-access place
 
 
Program Content
   
The three-hour PRM Associate Certificate exam is split into the following eight sections:  
   
Section
 Name
No. of questions
Percentage
A
 Risk Management, Risk and Return
12
13%
B
 Governance and PRMIA Standards
11
12%
C
 Financial Markets
12
13%
D
 Interest Rate Risk and Hedging 
8
9%
E
 Market Risk Management and ALM
12
13%
F
 Retail and Commercial Credit Risk Management 
12
13%
G
 Operational Risk Management and Performance Measures
11
12%
H
 Case Studies
12
13%
 
 

The intensive three-day instructor-led session, complemented by the Acumen eLearning System, will cover the entire syllabus, as in the details below...
 
 
Course Outline
   
 Section A: Risk Management, Risk and Return
   
Definition of financial risk
Role of the risk manager
Risk terminology
Types of risk: Market, Credit, Operational, Reputational, Legal, Business, Liquidity
The balance between risk and reward
Risk-adjusted returns
Implementing a financial risk management program
Hedge accounting
Hedging at Merck
Diversification
Portfolio theory
The efficient frontier
The value of a call option
   
 Section B: Governance and PRMIA Standards
   
Importance of governance
Role of the Board of Directors
Typical financial risk management structure
Basic risk management policies
Importance and meaning of an Escalation Policy
Role of external parties (external audit, regulators, “the market”)
The seven core PRMIA Governance Principles
How the PRMIA Governance Principles apply to the Board
How the PRMIA Governance Principles apply to the finance and accounting function
How the PRMIA Governance Principles apply to the risk management department
PRMIA Standards of Best Practice, Conduct and Ethics for Professional Risk Managers
Positive role of risk management in the business process
Basic operations of the PRMIA organization and practices
   
 Section C: Financial Markets
   
Money markets
Bond markets
Stock markets
Foreign exchange markets
Futures markets
OTC markets
Commodities markets
Energy markets
   
   
 Section D: Interest Rate Risk and Hedging
   
Definition of interest rate risk
Yields and bond prices
The yield curve and bond prices
Duration and convexity
Risk of a single security
Portfolio risk
Principles of swaps
Principles of options
Caps and floors
Swaptions
Exotic options
Financial engineering
   
 Section E: Market Risk Management and ALM
   
Notional amounts of exposure
Option “Greeks”
The concept of Value at Risk (VaR)
Value at Risk and risk limits
Determining Value at Risk measures
When VaR doesn’t work
Stress testing and extreme events
Scenario planning
Liquidity risk
What is ALM?
Role of the ALCO
Funding gaps
Duration gaps
Liquidity risk in banks
Funds Transfer Pricing (FTP)
   
 
 Section F: Retail and Commercial Credit Risk
                  Management
   
Role of the credit officer
Retail credit risk
Credit scoring
Default, default rates and loss rates
The value of a customer
Securitization and risk transfer
Pricing risk
Role of rating agencies
Credit ratings
Migration of credit ratings
Internal rating scores and methods
Basic financial measures in a loan risk assessment
Loss Given Default (LGD)
Counterparty credit risk
Credit models
Risk of a single credit
Portfolio credit risk
Credit VaR
CreditMetrics
MKMV models
Actuarial and reduced-form models
Overview of credit derivatives
   
   
 Section G: Operational Risk Management and
                  Performance Measures
   
Operational loss
Quantifying operational loss
Link between operational and other risks
Key risk indicator
Key risk driver
Framework for analysing operational risk
Implementing an operational risk framework
Implementing a scenario-based process for assessing and quantifying operational risks
Assessing risks from new business processes, products or change management initiatives
Mitigation and mitigation techniques
Role of insurance in operational risk transfer
Risk capital
Core uses of risk capital
Risk capital vs. regulatory capital
RAROC
Uses of RAROC in business decision making
   
 Section H: Case Studies
   
The US S&L Crisis
Continental / Penn Square
Metallgesellschaft
Orange County
Riggs Bank
LTCM
California Power Crisis
Bankgesellschaft Berlin
Credit Lyonnais
NAB FX Options
Barings Bank
WorldCom
Banker’s Trust
Daiwa
G30 Report and Recommendations
Governance lessons
Market risk lessons
ALM lesson
Credit risk lessons
Operational risk lessons
Governance lessons
   
 Mock Examination and Review
   

 
 
Accreditation


 

"I enjoyed the references to newspaper articles. The descriptions of CDO/SIV liquidity issues was VERY interesting and pertinent - I think I have a much better understanding of the whole credit crunch right now."

– Maya F.